Rent vs Buy Calculator
Compare the financial impact of renting vs buying
Last updated: January 2025
Buying is Better!
Over 10 years, you'd save $117,819.79
Break-even point
Year 1
About This Tool
The rent vs buy calculator helps you make one of the biggest financial decisions of your life by comparing the long-term costs and wealth-building potential of renting versus buying a home. Understanding the true financial impact goes beyond just monthly payments.
What is Rent vs Buy Calculator?
This calculator compares the total financial impact of renting versus buying a home over a specified time period. It accounts for all costs including mortgage payments, property taxes, maintenance, appreciation, equity building, and rent increases to determine which option builds more wealth.
How It Works
The calculator tracks both scenarios over time. For buying, it calculates mortgage payments, taxes, insurance, maintenance, and home appreciation while tracking equity growth. For renting, it factors in rent increases and opportunity cost. The comparison shows which option results in a better financial position at the end.
Formula
Net Worth (Buy) = Home Equity - Total Costs Paid; Net Worth (Rent) = Investment Returns on Savings - Total Rent Paid
Buying
Renting
Net Worth Comparison
Monthly Costs
Buying (Month 1)
$2,755.95
Renting (Month 1)
$2,000
After 10 Years
💡 Consider Also
- • Flexibility of renting
- • Tax benefits of owning
- • Transaction costs (6% when selling)
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When to Use This Calculator
- 1When deciding whether to continue renting or buy a home
- 2Before relocating to a new city to evaluate local markets
- 3When interest rates or housing markets change significantly
- 4To determine how long you need to stay for buying to make sense
- 5When comparing expensive markets where buying may not be advantageous
Pro Tips
- •The break-even point is crucial - buying often takes 5-7 years to be financially better
- •Factor in the opportunity cost of your down payment
- •Consider lifestyle factors: flexibility of renting vs stability of owning
- •Real estate appreciation varies significantly by location
- •Include transaction costs (6% selling commission) in your calculations